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Bad News Is Still News
By: Jeff Louis
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The conflicting information that comes out of the ad industry is indicative of the great spinners that exist: one day a company is done, and the next it is top of the heap. And it's not all the 'media;' a good portion of the chaos is simply due to the fact that all of the players are twirling from one extreme to another.

The clearest indicator? The daily newspaper. In one story, the industry is ensconced in secret meetings regarding the monetization of free information; the next story shows how out of the black they have fallen. Blood Red. After a week of flurried activity regarding the newspaper corps, silence. And perhaps that is the real news.

Moody's debt analyst scrutinized the industry today and was able to supply a single fact: no business, as usual, for newspapers. Known as generators of content, it would be fitting for a large portion of operating expenditures to be allocated to reporters, editors, managing editors...anything or anyone that remotely touches the printed word. Pencils. Computers.

Nope. A mere 14% of the cash operating expenditures are levied against content creation, the SINGLE purpose for which a newspaper exists. Seventy percent supports distribution and corporate. The final 16% is spent on the sales and sales support side of the business. Talk about the inverted pyramid! It's the 30/70 rule, where 30% are bread winners and the remaining 70% are dough boys.

"Ultimately, we expect the industry will need to reverse the vertical integration strategy through cross-industry collaboration and outsourcing print production and distribution processes,” said Puchalla. “Although newspapers may lose some of their in-house control over press time, they would also release resources to beef up investment in content and technology.”

Reverse vertical integration? NO. Newspapers need readers, ad sales, and a method to make money from online content. "Reverse vertical integration" sounds like something heard in Rocket Science Class. That, and the word 'monetize' must erased from the data banks.
 



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About the Author

Jeff Louis: Media Planner, Brand Project Manager, blogger, and aspiring writer. Please leave a comment or get in touch with Jeff on Twitter. As always, thank you for reading!

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